Benefits to Register a Business in Canada - Tax Benefit

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Benefits to Register a Business in Canada - Tax Benefit

We often hear expressions like ‘Welcome Canada Tax Benefit’, “Welcome to Canada” cash benefit and so on. Is it true? Really, is there any Cash Benefit distributed by the CRA or any other Canadian Government agency on coming to Canada? If you are looking for answers to these questions, then you are at the right place.

If you are a newcomer in Canada, you may be eligible for few benefits in the form of some regular payments (Monthly or Quarterly) by the Canada Revenue Agency (CRA). These benefits are:

  • Goods and Services Tax / Harmonized Sales Tax Credit (GST/HST Credit) 
  • Climate Action Incentive Payment and / or
  • Canada Child Benefit and Child Disability Amount 

Now let’s understand what are these payments or credits and how can a new comer can benefit from the following:

Goods and Services Tax / Harmonized Sales Tax Credit (GST/HST Credit)

Whenever we spend money on purchasing some goods or services in Canada, we pay GST / HST on such payments of goods /services (except on Exempt goods /service). In order to help the individuals and families with low or moderate income, the Canadian Government has this scheme under which you receive the regular payments of GST / HST Credit based on your / your family net income.

Therefore, after arriving in Canada and getting your SIN, you need to fill and file Form RC 151 –GST / HST Credit Application. 

Form RC151 is a combined application form for applying for your GST / HST Credit as well as Climate Action Incentive Payments. This form can only be used by individuals with no children.

The eligibility and the amount of entitlement for the payment of GST / HST credit is calculate by CRA based on the total income from all sources within Canada as well as outside Canada.

If the CRA find the applicant is entitled for the GST / HST credit based on his / her application, the CRA will inform about the applicant for his / her entitlement for the GST /HST credit payments. These payments include provincial tax credit also like Ontario Sales Tax Credit, BC Climate Action Incentive credit etc. 

These payments are generally made on quarterly basis i.e. January, April, July and October. 

Once you receive these payments, then in order to continue receiving these payments in the future years also, individuals and their spouse must file their Income Tax Returns regularly on time. 

Climate Action Incentive Payment (CAIP)

The Climate Action incentive Payment (CAIP) is another benefit in the form of regular quarterly payments by the Canadian Government / CRA to the newcomers in Canada. This payment is made to set off the cost of Federal Pollution pricing.

The payment of CAIP is not linked with Income instead it is based on the province of Residence. The CAIP payments are made in the provinces like Ontario, Alberta, Manitoba, Nova Scotia, Prince Edward Island, Saskatchewan, Newfoundland and Labrador. On the other hand if you a resident of British Columbia, Quebec etc. then you may not be able get the CAIP payments.

In order to get the benefit of CAIP payments, the newcomers in Canada have to file Form  RC151, which is a application form for applying for your GST / HST Credit as well as Climate Action Incentive Payments. This form can only be used by individuals with no children.

Amount of CAIP payments: The CAIP payments vary from province to province and depending upon individual’s marital status and number of family members. For example in case of Individual who is a resident of Ontario may get a basic amount $122 whereas the Alberta resident may get $193.

Like GST / HST payments, CAIP are also made on quarterly basis i.e. January, April, July and October and in order to continue receiving these payments in the future years also, individuals and their spouse must file their Income Tax Returns regularly on time. 

Canada Child Benefit (CCB) and Child Disability Benefit 

  • Canada Child Benefit (CCB) is a regular payment by the CRA to the eligible families to help them in raising children under 18 years of age. 
  • The eligibility criteria for claiming under Canada Child Benefit (CCB) is a bit different from the GST / HST Credit and CAIP.
  • If the newcomer satisfies the eligibility and other conditions, then an application in Form RC66 needs to be filed along with necessary documents.
  • Apart from CCB, if the child suffers from any disability and the same falls within the definition of ‘disability’ then Form T2201 is to be filed to claim the payments for the same. 
  • The payments of Canada Child Benefits are paid on monthly basis and is based on the Adjusted Family Net Income (AFNI).

So finally, What about Canada Welcome Benefit

So, even after explaining about all the above benefits / payments by CRA to newcomers, our initial question remains unanswered i.e. what is “Welcome Canada Benefit”?

Honestly speaking there is nothing like “Welcome Canada Benefit”, it’s only a terminology, an expression or aphrase used by few Tax Consultants to attract / make clients who are new in Canada, primarily targeting the students who are new in Canada.

In real sense, the above benefits / payments available to new immigrants after arrival in Canada are the real benefits offered by Canadian Government to help and welcome the new immigrants in Canada.